Categories: Blog

Your Bank is Not Your Books

One of the most common misconceptions about running a small business is that your bank balance is ‘good enough’ when it comes to knowing how your business is doing.

Why would a small business owner need bookkeeping services when they can just log into their banking app and see their bank and credit card balances?

For example, we once had a client that was considering discontinuing bookkeeping services to keep costs down. The business had 15 stores around the state, each with its own bank account. At the end of the month the client would login to his bank account and if he had > X dollars in each account, he was happy.

BUT what he didn’t realize is that his store Managers knew what he was doing, so they simply stopped paying bills on time to maintain higher bank balances and make their store look better. Meanwhile, the bills were piling up and the Company’s earnings were in the tank!

Obviously, business owners and managers need a true financial picture to know how their business is doing and whether they need to make changes.

 

By: Hollie Bourne, Quality Back Office

hollie bourne

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